Florida taxpayers, beware. President Barack Obama’s administration is quietly implementing one last massive taxpayer-funded bailout for special interests. Not only that, this bailout would prop up the Affordable Care Act only months before the law will likely be repealed.
So which special interests are getting your money? Health insurance companies.
Six years ago, health insurers were some of the Affordable Care Act’s biggest fans. They lobbied for the law because they thought it would be a financial windfall — it literally forces Floridians to buy their product.
But instead of finding gushers of cash, they’re drowning in red ink. Health insurers in Florida and across the country lost $3.2 billion in 2014 and more than $10 billion in 2015. This year’s losses will be even higher.
Many insurers are now abandoning the law. So far, five have pulled out or will pull out of Florida between 2016 and 2017, and the remainder may soon follow suit. Nationwide, well over 100 insurers have already fled the law’s exchanges.
That’s where the taxpayer bailout comes in.
Obama’s legacy is directly tied to his signature law, so he’s trying to stop the exodus at any cost. But insurers will only stay if someone subsidizes their losses.
The government has already tried. The Affordable Care Act contains two programs that shift money from profitable insurers to unprofitable ones, known as reinsurance and risk corridors. But the administration never expected so many companies to lose so much money. As a result, insurers have only received 12.6 percent of what they’ve requested.
The administration has nonetheless said it views these payments as an “obligation” and that it’s “explor(ing) other sources” of funding. But the only other source is taxpayers’ wallets.
This bailout could take three forms — all of which Congress can and must stop.
The first bailout is already happening. The law’s plain text requires the Obama administration to deposit $5 billion from the reinsurance program into the U.S. Treasury. Instead, it sent the money to insurers — a blatant theft from taxpayers. The Government Accountability Office, a federal agency, declared this move illegal.
The second bailout involves Congress. Lawmakers have wisely required the other program, risk corridors, not to spend a cent of taxpayer money. But the Obama White House wants Congress not to renew this provision. This would put Florida taxpayers on the hook for tens of billions of dollars.
If this doesn’t work, the Obama administration has one last option. Many insurers have sued the federal government claiming they’re owed reimbursement for their losses. The president’s own Department of Justice rejects this argument, but the White House doesn’t care. It’s trying to settle the lawsuits and pay nearly 200 insurers using an obscure account — funded by taxpayers — designed to cover federal legal expenses. Once again, the Government Accountability Office ruled this move illegal.
The White House is moving forward anyway. Yet any bailout will only use billions of taxpayer dollars to prop up the Affordable Care Act at a time when Floridians can least afford it. The state’s average premium hikes for 2017 are on track to be more than 17 percent. There’s also dwindling competition, narrower networks and sky-high deductibles of up to nearly $7,000 for the cheapest plans.
Congress must block any further bailouts and recoup the $5 billion that’s already been funneled to health insurers. Then, come January, Florida’s lawmakers in D.C. must work with President-elect Donald Trump to repeal this failing law once and for all.
The bottom line is that the Affordable Care Act doesn’t need a bailout. It needs to be dismantled so that it can’t do any more harm to Floridians than it’s already done.